Considering Student Loan Debts in Property Division

Posted on Jan 3, 2014 12:00am PST

In equitable property division states like Georgia, the marital property
and assets of both divorcing parties is divided based on what is fair
and equitable for each. Unlike in community property states, Georgia,
Georgia readers should take note that equitable property division does
not always result in a 50/50 split, because there are a lot of things
being considered to determine a fair divorce settlement.

Besides the marital property and assets, both parties debt must be divided
as well. Mortgages, personal loans and car loans are among the marital
debt to be divided in property division, together with student loan debt.

Student loan debt becomes a family law issue since many Americans, including
Georgia residents, are using the financial aid to earn a degree that will
land them a good-paying job. When divorce happens, however, both spouses
may be financially liable for the student loans incurred by one of them.

In the event of a divorce, student loan debt may be subject to property
division if the money obtained from the loan was used for household expenses
and other costs. If the loan was spent for school fees, books and tuition,
it may be considered separate debt. Factors like the earning power of
each spouse may affect the division of debt in divorce as well. For example,
if one spouse does not have a significant income or less earning potential,
it might be fair for the other party to pay the student loan. The simplest
rule that applies on property division and debt is whether the money obtained
in the loan benefitted both parties.

Dividing marital property in a Georgia divorce is sometimes complicated.
It might be more complicated, however, if marital debts, like student
loan debt, are included. Spouses may be less interested about debts, but
it must be taken into account if they desire to have a fair and equitable
divorce settlement.

The information on this website is for general information purposes only.
Nothing on this site should be taken as legal advice for any individual
case or situation. This information is not intended to create, and receipt
or viewing does not constitute, an attorney-client relationship.